The risk that Mexico will lose the investment grade increases and could cause an investment outflow of $ 44.3 billion, says JP Morgan

The risk that Mexico miss the grade of investment It is increasing and if it materializes in late 2021 or early 2022, it could cause an outflow of investments $ 44.3 billion who are sensitive to the rating, he warned JP Morgan.

The investment bank specified that the holdings of rating-sensitive investments are higher for M bonds, for an amount of $ 31.5 billion, followed by corporate paper in hard currency for 8.9 billion dollars and UMS bonds for 4 billion dollars.

If all the passive participations and half of the active participations, the forced sale would amount to 24.7 billion dollars.

He stressed that it increases the risk of Mexico of losing the investment grade, and in the absence of a change in the agenda of the current federal administration, could materialize in late 2021 or early 2022.

“The structural growth Low, the displacement of private investment, the collapse of the energy sector, the disappointing response to the pandemic, and the persistent delay of a comprehensive tax reform suggests an increasing risk of further reductions in the credit rating“He stressed in his report called Mexico: Fallen angel risks and forced selling implications.

The above, he said, despite some good news on the trade front, such as the implementation of Treaty between Mexico, United States and Canada (T-MEC) 1st of July.

He reported that the midterm elections in June 2021 must be closely watchedThey could accelerate the fall or trigger more pragmatic actions by the government.

With information from Notimex